Financial Results of a Business Are Affected By Ethics

Financial Results of a Business Are Affected By Ethics

“Ethics is knowing the difference between what you have a right to do and what is right to do.” – Potter Stewart

Financial Results of a Business Are Affected By Ethics

Businesses that hold strong ethical identity are known to maintain a high degree of stakeholder satisfaction.  This also positively influences the financial results and generates a flow of income. Similarly, when there is a lack of professional and personal ethics, a business is likely to experience negative financial results. It is important for a business owner to ensure that there is good ethical behavior within the workplace as this would help the business to improve its economic performance.

Improvement of an Employee’s Morale

Everyone desires to work in an environment where they are being treated with respect, dignity, and where there is fairness. An employee would know that they will be treated well at work if the business has managed to establish a high standard of ethical conduct. Such an employee would be revived with motivation, in turn, try their best to ensure that they treat customers in a similar manner. When a business has a high-level customer satisfaction, it would most probably generate a higher rate of customer loyalty. In the long run, such a business would also generate more market shares. Customers might not deal with businesses that they find to be suspicious and that they are afraid of. When a business contributes to its community, it tends to create and maintain a better relationship with the government. In the long run, such a business would be more successful. In addition to that, such type of a business would not easily get destructed by unnecessary lawsuits among other destructive activities that would detract it from producing products and services of high quality. This type of business will be able to experience a positive financial result.

Validating Returns on Investment

For a long-term success of any business, it is important that it ensures to keep accurate records. A business’s performance can be hurt if it announces huge returns that have resulted from fraudulent accounting. Conducting ethical business practices can assist to avoid legal problems as well as negative financial results that are likely to arise the moment unethical practices have been discovered. Ethical business practices can help a business to provide consistent returns on its investment while it continues to focus on its efficient and effective operation. Such a business would not be destructed by negative public reputation and bad press.


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